Brexit could spell the death of Northern Ireland

"Leaving the EU would also cut-off vital funding which has done so much to copper-fasten peace in recent years"

Monday, 13 June 2016
8:25 AM

By Kevin Meagher

Does Brexit threaten the Northern Ireland peace process? That was the big claim made last week by a brace of former prime ministers, Sir John Major and Tony Blair.

On a trip to Derry the former premiers warned of the risks of a Leave vote. Sir John warned that it would be an "historic mistake" to take Northern Ireland's progress in recent years for granted, while Mr Blair said the province's stability "is poised on carefully-constructed foundations."

The argument goes that a vote to leave the UK would see the imposition of much stricter border controls between the Republic of Ireland and Northern Ireland. Moreover, they suggest that there would be demands by Irish nationalists for a referendum on leaving the UK to join with pro-EU southern Ireland instead, potentially destabilising the situation in the North.

While most UK-wide polls show the result fairly evenly balanced between the 'Leave' and 'Remain' camps, we know from the 2015 General Elections Survey that there is a much deeper divide between Northern Ireland's Catholic and Protestant communities, with 61% of Catholics in favour of remaining, but just 31% of Protestants.

Therefore warning about the potential imposition of strict border controls is somewhat tin-eared given nationalists are already strongly in favour of the EU, while sceptical Unionists – who need to be won round - would love to see tougher controls.

The bigger issue here is how Northern Ireland would cope outside the EU. A report last March for the devolved assembly's enterprise committee found that quitting would cost Northern Ireland £1 billion a year - equivalent to a three per cent fall in economic output.

The report's author, Dr Leslie Budd from the Open University, argued that as well as damaging Northern Ireland's attractiveness as an entry route into the single market, transaction costs for trading into the EU would 'rise significantly' and inhibit economic co-operation with the neighbouring Irish Republic. (This is important, given that Northern Ireland plans to harmonise its corporation tax rates with the lower levels found in the Republic).

Leaving the EU would also cut-off vital funding which has done so much to copper-fasten peace in recent years. Between 2007-13, Northern Ireland received £2.4 billion from the EU and continued funding deals up to 2020 are 'central to Northern Ireland[s] economic and innovation strategies'.

It's not as though Northern Ireland is in great shape to begin with. Given its tiny population (1.8 million - equivalent to the size of Hampshire), its engorged public sector and its high, structural poverty and worklessness, it should think twice before jumping off the ledge.

The more interesting question is whether if Britain did find itself outside the EU, with demands from pro-EU majorities in both Northern Ireland and Scotland for referendums on leaving the UK, would the British political class exert much effort in trying to save Northern Ireland?

A report by the Northern Ireland Statistics and Research Agency (NISRA) on the 'Structure of the NI Economy,' published in December 2015, highlights how peripheral Northern Ireland's economy is to the UK as a whole.

Its output was worth just £37 billion (roughly equivalent to the value of Yemen’s), compared to £129 billion for Scotland and 1.6 trillion for the UK as a whole. So although Northern Ireland makes up 2.8% of the UK’s total population, it comprises just 2.2% of its overall economy.

Even accounting for the size differentials, this is pretty marginal. And given its deep-seated economic problems and tiny contribution to the UK economy, Northern Ireland also requires £9 billion a year from the British exchequer to stay afloat.

It is hard to imagine the British political class trudging the highways and byways of County Tyrone making the case for Northern Ireland to remain in the UK, in the same way they would for Scotland.

This is particularly the case given the fact that the economics of joining with the Irish Republic make a lot more sense. Indeed, a recent US academic study led by Dr Kurt Hübner, director of the Institute for European Studies at the University of British Columbia, makes the case that Irish unity could be worth 36 billion euros for the island of Ireland overall, with long-term improvements in productivity and growth.

Anti-European Unionists, on the cusp of a constitutional crisis, and with a more rational economic model waiting in the wings, should think very carefully before dismissing warnings of Brexit triggering the break-up of the UK. The risks are very real.

Kevin Meagher is associate editor of Labour Uncut and a former Special Adviser at the Northern Ireland Office

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